United Community Banks, Inc. Reports 17% Gain in Diluted Earnings per Share for Second Quarter 2006

-- Record Second Quarter Earnings
Diluted Earnings per Share of $.41 -- Up 17%
Net Income of $17 Million -- Up 23%
Return on Tangible Equity of 17.68%
Total Assets Rise to $6.3 Billion
-- Strong Loan Demand and Rise in Net Interest Margin Drove Performance

United Community Banks, Inc. (NASDAQ: UCBI), Georgia's third-largest
bank holding company, today announced record financial results for the
second quarter of 2006. Compared with the second quarter of 2005, the
company achieved a 16% increase in total revenue, a 23% rise in net
income and a 17% gain in diluted earnings per share.

For the second quarter of 2006, net income was $16.9 million compared
with $13.8 million a year earlier. Diluted earnings per share
increased to $.41 from $.35 a year ago. Total revenue, on a taxable
equivalent basis, was $70.6 million compared with $60.6 million for
the second quarter of 2005. Return on tangible equity was 17.68% and
return on assets was 1.10%, compared with 19.21% and 1.03%,
respectively, a year ago.

"Strong demand for loans and deposits continued across all markets,"
said Jimmy Tallent, President and Chief Executive Officer of United
Community Banks. "Loans increased $226 million during the second
quarter, or 20% on an annualized basis, and helped drive the increase
in net interest revenue. We more than funded our loan growth by
adding $228 million of deposits this quarter -- more than half were
core deposits. The strong loan growth pushed total assets to $6.3
billion, a 14% increase from a year ago. Our net interest margin was
4.34%, up 22 basis points from a year ago and up 1 basis point from
last quarter, as rising short-term interest rates continued to
positively affect our slightly asset-sensitive balance sheet."

For the first six months of 2006, net income increased $5.8 million
to $33.0 million, up 21% from $27.2 million for the first half of
2005. Diluted earnings per share of $.80 increased $.11, or 16%, from
$.69 for the first six months of 2005. Total revenue, on a taxable
equivalent basis, was $138.6 million, up 19% from $116.7 million a
year ago. Return on tangible equity was 17.67% and return on assets
was 1.10%, compared with 19.52% and 1.04%, respectively, a year ago.

At June 30, 2006, total loans were $4.8 billion, up $737 million, or
18%, from a year ago. All of the loan growth was organic. "Organic
growth, with an uncompromising focus on sound credit quality, is at
the core of our balanced growth strategy and is further supported by
our focused de novo expansion," Tallent said. "We find the right
people and build around them, usually adding two to four new offices
a year. The most recent example of this strategy was the
announcement yesterday that we will open our 25th community bank in
Cleveland, Tennessee, along the high-growth I-75 corridor. Led by
veteran Cleveland bankers Mickey Torbett and DeWayne Morrow, our new
bank downtown will begin full-service operations as United Community
Bank - Cleveland later this month with a total of ten seasoned, local
bankers. I am excited to welcome this fine team to our family of
United banks and look forward to their growth opportunities in this
attractive market."

Tallent continued, "De novo expansion will continue to allow us to
open offices in selective new markets and expand our franchise.
Earlier in the year, we opened three offices in Georgia -- a second
location in Savannah, a fifth location in Hall County, and a
commercial loan office in Jasper, just north of Atlanta in Pickens
County. Earlier this quarter, we announced an agreement to acquire
two banking offices in Sylva and Bryson City, North Carolina and we
expect the transaction to close in September. Both of these offices
are in markets where we already have a presence and a deep knowledge
of the banking environment.

"The highest level of customer service continues to be our
distinguishing characteristic," Tallent said. "Our relentless focus on
service has generated customer satisfaction scores that continue to
exceed 90%, well above the comparable industry average of 75%. This
personal, caring brand of service is invaluable in building deposits
through customer referrals while also maintaining and growing our
long-term relationships with existing customers."

For the second quarter, taxable equivalent net interest revenue of
$62.3 million was up $11.1 million, or 22%, from the first quarter of
2005. Taxable equivalent net interest margin for the second quarter
was 4.34%, compared with 4.12% a year ago and 4.33% for the second
quarter of 2006. "Our balance sheet has remained slightly asset
sensitive, which allowed us to benefit from the rise in interest
rates as reflected in the expansion of our margin throughout 2005 and
into the first half of 2006," Tallent said.

The second quarter provision for loan losses was $3.7 million, which
increased $900,000 from a year earlier and $200,000 from the first
quarter of 2006. Annualized net charge-offs to average loans were 9
basis points for the second quarter, compared with 11 basis points
for the first quarter of 2006 and 14 basis points for the second
quarter of 2005. At quarter-end, non-performing assets totaled $8.8
million compared with $8.4 million at the end of the first quarter of
2006 and $13.5 million a year ago.
Non-performing assets as a
percentage of total assets were 14 basis points at quarter-end,
unchanged from the first quarter of 2006 and down from the 24 basis
points at June 30, 2005. "Strong credit quality, rooted with our
guiding principle of securing loans with hard assets, is essential to
our balanced growth strategy and overall success," Tallent said.

Fee revenue of $12.0 million was down slightly from $12.2 million for
the second quarter of 2005, primarily due to $530,000 in gains from
the sale of two banking offices in the second quarter of 2005. Also
impacting fee revenue this quarter was $280,000 in charges for the
prepayment of Federal Home Loan Bank advances that were part of our
balance sheet management activities. Service charges and fees on
deposit accounts increased $548,000 to $6.8 million, primarily due to
growth in transactions and new accounts resulting from core deposit
programs and higher ATM and debit card usage fees. Mortgage fees,
consulting fees and brokerage fees remain substantially unchanged
from a year ago.

Operating expenses of $43.5 million increased $4.7 million, or 12%,
from the second quarter of 2005. Salaries and employee benefit costs
of $28.3 million increased $3.0 million, or 12%, from the second
quarter of 2005 due to the increase in staff to support our
significant expansion efforts and business growth. Communications
and equipment expenses increased $616,000 to $3.7 million due to
further investments and upgrades in technology equipment to support
business growth and additional banking offices. Advertising and
public relations expense rose $249,000 to $1.9 million reflecting the
costs of initiatives to raise core deposits and efforts to generate
brand awareness in new markets. Occupancy expense increased $198,000
to $2.9 million reflecting the increase in cost to operate additional
banking offices added through de novo expansion. The increase in
other operating expense was primarily due to write-downs on
foreclosed real estate properties and higher costs to support business
growth.

"We had a positive operating leverage of four percent this quarter,"
Tallent said. "Also, our operating efficiency ratio of 58.53% was
within our long-term efficiency goal of 58% to 60%. This reflects the
continued strength of our existing franchise, strong revenue growth
and disciplined expense controls, which more than offset the cost of
reinvesting for the future through our de novo expansion efforts,"
Tallent said.

"Our outlook for the balance of 2006 is for earnings per share growth
at the upper-end of our long-term goal of 12% to 15%," Tallent said.
"We anticipate core loan growth to be slightly above our targeted
range of 10% to 14%. Our net interest margin has benefited from
rising short-term interest rates; however, we expect the margin could
decline slightly in the second half of 2006, due to further pricing
competition for deposits. This outlook assumes a stable economic
environment and continued strong credit quality.

"Our results for the first half of 2006 are leading towards another
year of strong growth and superior operating performance," Tallent
stated. "We are committed to excellent customer service while
maintaining solid credit quality as we continue our efforts to build
shareholder value through our balanced growth strategy of strong
internal growth, complemented by selective de novo and merger
expansion."

Conference Call

United Community Banks will hold a conference call on Tuesday, July
25, 2006, at 11 a.m. ET to discuss the contents of this news release,
as well as business highlights for the quarter and the financial
outlook for the remainder of 2006. The telephone number for the
conference call is (866) 700-7441 and the pass code is "UCBI." The
conference call will also be available by web cast within the
Investor Relations section of the company's web site at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the
third-largest bank holding company in Georgia. United Community Banks
has assets of $6.3 billion and operates 25 community banks with 94
banking offices located throughout north Georgia, metro Atlanta,
coastal Georgia, western North Carolina and east Tennessee. The
company specializes in providing personalized community banking
services to individuals and small to mid-size businesses. United
Community Banks also offers the convenience of 24-hour access through
a network of ATMs, telephone and on-line banking. United Community
Banks' common stock is listed on the Nasdaq Global Select Market
under the symbol UCBI. Additional information may be found at the
company's web site at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by
Federal Securities Laws, including statements about financial outlook
and business environment. These statements are provided to assist in
the understanding of future financial performance and such performance
involves risks and uncertainties that may cause actual results to
differ materially from those in such statements. Any such statements
are based on current expectations and involve a number of risks and
uncertainties. For a discussion of factors that may cause such
forward-looking statements to differ materially from actual results,
please refer to the section entitled "Forward-Looking Statements" on
page 4 of United Community Banks, Inc.'s annual report filed on Form
10-K with the Securities and Exchange
Commission.